By Bruno Waterfield - 6th January 2006
The EU has piled pressure on Bolivian president-elect Evo Morales to keep his hands off European energy investments and to keep up the fight against cocaine production.
The left-wing South-American leader is coming under strong international pressure to water down his plans to nationalise Boliva’s energy sector.
The industry includes major holdings by European corporations, especially Spanish energy companies Repsol-YPF, Iberdrola and Red Electrica Espana.
During meetings in Brussels on Thursday, Spanish EU foreign policy chief Javier Solana linked European aid to Bolivia with concerns over Morales' nationalisation programme.
“He assured that EU would continue to assist Bolivia's efforts to stimulate economic growth, promote social justice and fight poverty," said a statement.
“In this context, he also underlined the relevance of ensuring an environment of stability and legal certainty for international investments.”
The EU is working hard to convince Morales that state control of Bolivia’s burgeoning energy sector – gas reserves total 53.3 trillion cubic feet – is the wrong way to fight poverty.
“Legal security is fundamental. This is a country in need of money from abroad, foreign investment,” Solana told journalists.
Morales arrived in Brussels from Madrid where he sought to assure Spain that European business has “nothing to fear” from his gradualist nationalisation plans.
“We would like the oil companies to be partners, but not to be owners. We want to control the companies, so we are going to nationalise the companies,” he said.
Bolivia is the poorest country in South America and over 60 per cent of Bolivians live below the poverty line, with 30 per cent living on less $1 per day.
Morales is Bolivia’s first indian president, up to 70 per cent of Bolivians are indigenous representing most of the country’s poorest.
EU aid to Bolivia for financial, technical and economic cooperation is worth €133.5 Million between 2002-2006.
Morales, a Bolivian coca-farmers union leader, is also under pressure from the US and EU over his opposition to efforts to eradicate production of the plant used to make cocaine.
The leftist leader, with close links to Venezuela’s Hugo Chavez, has promised farmers he would study expanding areas where coca can be legally grown.
“Unilateral decisions on coca production are not welcomed. Any decision on this issue must be respectful of UN conventions,” warned Solana’s spokeswoman.
UN figures rank Bolivia as the world’s number three coca grower after Colombia and Peru and the country is estimated to have produced up to 118 tons of cocaine in 2004.
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